McFarland: School board should be part of city hall TIF discussions

Springfield School Board member Scott McFarland is again urging the board to get more involved in city tax increment financing discussions.

McFarland brought the issue up again last week after learning of Mayor Mike Houston’s plan to make the old Springfield YWCA building the focal point for a replacement TIF district downtown after the current one expires in 2016.

McFarland asked the board to vote at its next meeting, Feb. 17, to make engaging with the city on new TIF proposals a formal policy.

McFarland says he understands the importance of TIF districts as a way to redevelop blighted properties, but noted school districts lose out on revenue anytime one is formed.

When a TIF is created, new property tax revenues are re-invested in the TIF district rather than being distributed to taxing bodies as normally happens. About 65 percent of a Springfield resident’s property tax bill goes to city public schools.

The maximum life of a TIF district is 23 years.

McFarland estimated the eight TIF districts citywide currently cost the Springfield School District about $4 million a year.

That’s a lot considering the school district is facing a $4.7 million budget shortfall this year and has cut about $12 million over the past three years, he said.

McFarland said he would like the board to negotiate a deal with the city where the school district could get reimbursed, possibly 10 percent, of money accrued in the TIF fund each year.

Now, Springfield schools usually only receive money once a TIF expires and there’s money left over. That happened recently when $3.8 million was awarded to the public schools from the Fiatallis TIF expiring.

“There needs to be some give and take so our district is not tied down for 23 years until the TIF expires,” McFarland said.

This isn’t the first time McFarland has urged the board to be more active in city TIF discussions. The last time, in 2012, didn’t go well.

Houston shot down an attempt to work out a deal with the school district regarding a TIF along Dirksen Parkway designed to accommodate a Schnucks grocery store at Singer Avenue.

Mike Farmer, the city’s economic development director, said Monday that the city would be open to discussing an agreement with the school board, but emphasized the creation of a downtown TIF district is still far off and hasn’t been approved by aldermen.

Farmer also noted the current downtown TIF pays out roughly $700,000 per year to different taxing bodies, and that school districts ultimately benefit from TIF districts because blighted property gets redeveloped over time, which generates more money in property taxes.

“You can make a strong case TIF districts are a benefit to the school district,” Farmer said.